Debt charities have seen a huge spike in people seeking help in the last few months. Free debt advice is in high demand as more people face redundancy and financial difficulties due to the pandemic.
So, when should you seek debt advice? And where can you find it?
- When to seek debt advice
- The face of debt after COVID-19
- Free debt advice charities
- Ask for a Community Money Advice centre
- Local authority programs
- Should you ever pay?
- More debt management tips
We all have the odd month where we’re a little short of cash. Last-minute or unexpected expenses crop up and take our spare cash. Things like insurance premiums, broken boilers, or car repairs all add up very quickly – even if you’ve budgeted for them.
However, if you have more than a couple of months where you feel stressed before payday and you’re losing sleep, it’s time to seek debt advice.
More people than ever seek free debt advice in their local communities or online right now, as the coronavirus pandemic of 2020 puts a lasting impact on everyone’s finances. Furlough, redundancies, and reduced working hours all mean many of us are scrimping like never before.
There’s no shame in debt. Approaching a debt advice charity or group means you’ll be working with trained advisors who see the impact of debt on a daily basis. They understand debt isn’t usually because you’ve gone on mad spending sprees – just that life costs more than you’ve earned.
Community Money Advice recently revealed that consumer debt stood at a whopping £207 billion at the end of June 2020 – and an additional 3.2 million claims for Universal Credit during lockdown, too.
This means they’ve seen a 400% increase in demand for free debt advice. People aren’t sure where to turn – but they can see that the ongoing impact of COVID-19 means they’re unlikely to be able to ride out a few more months of high costs and low income.
In fact, most people don’t have any savings buffer to rely upon when times are tough like this, either. One in ten British adults has no savings at all, while a third have less than £600. We’re supposed to save around 6 months’ worth of expenses to cover all eventualities – but in reality, it’s not possible for many.
Interestingly, despite debt worries spreading across the nation, and horrendous interest rates, more savings accounts have been opened since the start of lockdown than in years. This highlights how the COVID-19 pandemic has shone a light on finances in households across the UK.
Even if you’re struggling with debt now, having a savings account is a good idea – even if you use a savings app that simply ‘sweeps’ the rounded-up pennies from your day-to-day spending into a savings pot.
If you’re worried about debt – no matter how big or small the amount owed – contact someone for help. There are several debt advice charities that will help you for free:
StepChange offer a web chat service or you can call them on 0800 138 111 8am-8pm Monday to Friday, 8am – 4pm on Saturdays.
National Debtline has a personal and a business debtline – so if you’re self-employed and struggling, they’ll be able to help. Use their web chat services or call 0808 808 4000 between 9am – 8pm Monday to Friday.
Community Money Advice runs local centres with free debt advice, assistance with managing your creditors, and financial education to put debt into your past for good. Find your nearest centre here.
You can also read this handy guide from Credit Action on how to deal with debt.
Not every town or village has a free debt advice office – yet. However, if you think you – and lots in your area – need help, appeal to your local community for assistance.
Ask churches, community groups, or your local food bank to set up a Community Money Advice centre. Volunteers will receive training on debt advice and be able to help the people in their local community, too. With different types of set up available (face-to-face centres and telephone options), there’s something for every community.
You can also help other people by taking their budget coach training sessions, so you can teach others about managing their money to help avoid future debt.
Many local councils have debt advice help – though it could be limited. However, if you’re struggling with your bills due to coronavirus, it’s worth contacting your local council – they could help you access extra funding or discounts on your Council Tax bill to help reduce your financial stress.
The short answer here is: no! Never!
There is enough free advice available through debt charities that you shouldn’t ever have to pay for help. You’ll often find unscrupulous companies sitting at the top of your ‘debt relief’ Google searches – but they’ll tell you that you have to pay a fee.
You don’t have to pay any fee to the debt charities listed above – and they’ll help you in the same way as any ‘paid’ provider will. In fact, you’re going to get a better service from the charities – because you know they’re doing it to really help you, and not to gain profit!
From making extra cash on the side to budget management tips, we’ve got a lot of help on MoneyMagpie for anyone facing debt problems. Read these articles for